The SEC’s Costly Crackdown on Firms
In April 2024, SEC Deputy Director Sanjay Wadhwa updated the investor community on the SEC’s record-keeping enforcement initiative against broker-dealers and investment advisors. The efforts focus particularly on firms’ failing to properly record off-channel communications which discuss business activity, such as personal emails, messaging apps, and text messages. The
In April 2024, after extensive public debate and Congressional interrogation of Shou Zi Chew, TikTok’s CEO, President Biden signed into law the Protecting Americans From Foreign Adversary Controlled Applications Act (“the Act”), which will ban TikTok from the United States unless ByteDance, its parent company located in Beijing, divests TikTok’s U.S. business to approved entities
When can an investor bring an action against corporate directors and officers directly – i.e., on behalf of the investor herself, rather than derivatively, i.e., on behalf of the company? In a September 20, 2021, decision, the Delaware Supreme Court clarified a split in authority over whether corporate overpayment claims are direct or derivative
Attorneys for the investors in Tesla Inc. will argue that they have the right to use testimony from Elon Musk’s recent deposition in another case involving Musk’s control over Tesla and board conflicts in their action slated to go to trial later this month. The investors urge that any contradictory testimony could be used to
The Delaware Court of Chancery was asked last week to approve a $6.85 million settlement in case brought by a class of public stockholders challenging a corporate restructuring alleged to have favored insiders at the expense of the class.
According to this Law360 article, PennyMac Financial Services, Inc. had been set up as an
In an apparent question of first impression, the Delaware Court of Chancery is considering whether stockholders in a Delaware corporation can relinquish their rights to object to the sale of the company and waive fiduciary duty claims through a stockholder agreement. Law360 reports here that Vice Chancellor Sam Glassock III has asked for supplemental motion-to-dismiss
With litigation over section 220 demands becoming more frequent and contentious, the Supreme of Court Delaware weighed in an en banc ruling and affirmed shareholders’ rights to inspect a company’s books and records. In this protracted dispute which we’ve previously blogged about, AmerisourceBergen Corporation took the Chancery Court’s ruling allowing shareholders the right to inspect
Pharmaceutical company Gilead’s “overly aggressive defense strategy” received the ire of Vice Chancellor McCormick of the Delaware Court of Chancery, who found in a recent decision [$$] that shareholders easily showed they had the right to access books and records to investigate possible wrongdoing in connection with Gilead’s marketing of HIV drugs, and allowed the
AmerisourceBergen Corp. has asked the Delaware Supreme Court to reverse a Chancery Court ruling allowing shareholders the right to investigate the company’s books and records for corporate wrongdoing in connection with the opioid crisis. Amerisource Bergen argued before the full five-member panel that Vice Chancellor Laster’s prior ruling went too far and invites harassment.
Books
The SEC has recently enacted rules that make it tougher for shareholders to submit ballot proposals. As we previously blogged about, the rules now approved by the SEC by a 3-2 vote: (1) increase the monetary amounts and length of investment required to submit shareholder proposals and (2) raise the threshold of shareholder support required